KKR founders own about a quarter of company

By IBT Staff Reporter On 07/06/10 AT 1:32 PM

Kohlberg Kravis Roberts & Co co-founders Henry Kravis and George Roberts will own about a quarter of the private equity firm they founded after the firm is listed on the New York Stock Exchange, according to a regulatory by the company on Tuesday.

The firm is moving closer to gaining its long-sought NYSE listing, and on Tuesday it updated its filing with the U.S. Securities and Exchange Commission with details of senior executive ownership and pay.

KKR is going public via a complex route that involved buying its Amsterdam-quoted fund KKR Private Equity Investors and becoming a Euronext-listed company. Under that deal, KKR owns 70 percent of the new company.

Kravis and Roberts, who co-founded the firm in 1976, each own 87 million shares, according to the filing, which equates to just under 13 percent each of the total 683 million shares.

Based on the price of KKR's shares on Euronext at Monday's close, their stakes are worth around $809 million each. Their percentage ownership in the company, not previously disclosed, will be about the same before and after its NYSE listing.

The company as a whole is valued at around $6.4 billion, based on Monday's close in Amsterdam.

Kravis and Roberts are taking a yearly salary of $250,000, according to the filing.

They each also received a distribution of $22 million last year, of which the vast majority was their share of KKR's fee income, generated from businesses including KKR's capital markets, private equity funds and KKR asset management units. A small part is carried interest -- the percentage of profit that private equity executives take when their funds perform well.

In addition, Kravis and Roberts were both awarded a $70 million non-cash amount, which represents how KKR accounts for the difference in value between what they owned before KKR became a public company and how it is valued after becoming publicly traded.

KKR filed with the SEC in March to list on the NYSE and trade under the symbol KKR. It has said the listing would allow it to have a more permanent capital base, use stock to retain and attract staff, and have a currency to use in making acquisitions.

It has made several amendments to the original filing. The last one being awaited was today's filing detailing compensation.

The SEC needs to declare the listing registration effective before KKR can decide when the shares will start trading.